How can organized labor use participation in ESOPs as both a defensive and offensive tool in strengthening labor's bargaining power?

Question

What will be an ideal response?

Answer 1

Stock ownership as a defensive strategy refers to a union's acceptance of stock ownership plans as a substitute for higher wages and benefits (i.e., guaranteed compensation increases). In other words, to help keep a company competitive, the union agrees to stock ownership for its members, rather than outright pay increases. However, in recent years unions have become more aggressive about using their financial position (i.e., stock ownership) to take offensive action against employers as a way of protecting worker interests. Union pension funds, through significant ownership shares, use their rights as shareholders to submit shareholder proposal and resolutions to limit executive compensation, ensure the independence of outside board members, and bring about other changes in corporate strategies and governance. Purchasing and investment decisions can also be used as a way to reward companies that provide favorable treatment to workers or that are more likely to benefit union workers (i.e., investing in unionized companies).